US–Iran Ceasefire Talks: Always Two Days Away, Never Here
Summary
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Transcript
Nothing in this program should be considered investment advice. It is for educational purposes only. Please hit pause and read this disclaimer in full. We've been told for from the beginning of this event that a deal is imminent and there's no deal. At what point do people just start ignoring what tweets come out of the White House or Axios with, you know, them seeming to push the propaganda? Hello everyone and welcome a very special welcome to this episode of Finance. We have a lot to discuss today and back with me is Paul Ker of Ker Wealth Management. How you doing Paul? >> I'm doing good Chris. Having a good time during these very interesting times that we live in. >> Sure thing. So here's what I'd like to talk about today is going to be well I we're in the midst of the largest energy shock ever. But you wouldn't know it, Paul, from our markets, from the behavior of um oil is very different. You know, there's this old saying that we used to have back in the day when I was a trader, right? I did a lot of trading, which was um you uh you buy the rumor, sell the news. >> Yep. >> Okay. Oil's different. Oil is selling the rumor. I think it's going to buy the news. I actually think when when they announce that the straight is finally open, and we'll talk about that in just a second. How open is it? Not very. Um, but every time there's a hint of it being open, there's just like this massive wall of selling in oil. So, they're selling the rumor. Now, when it finally does open, I think the reality sets in. People like, "Oh, this is kind of a hot mess." Of course, it is. >> Um, but it's behaving very bizarrely. I'm watching very seasoned oil traders and longtime market participants really scratching their heads going, "This is not how this is supposed to work. This is bizarre this stage." >> You know, somebody mentioned it a week or two ago said, "Sell the tweet and buy the reaction." Right? So, the tweet drives the prices down and then buy the reaction depending upon how fast you move. And I thought that's just kind of bizarre how this market environment is cuz fundamentals don't matter because there's so much propaganda and effort being put into keeping those prices down and draining our strategic petroleum reserves. >> Yeah. >> Not a lot makes sense. >> No, it doesn't. Not I I I was on a number of interviews over this past few days and you know the phrase I'm using is the fog of diplomacy. Supposed to be the fog of war. I've never been through a thing like this. Marco Rubio ostensibly the State Department uh head isn't saying anything at all. Every so often he comes out and says, "Oh, there could be progress soon." But otherwise, this whole thing is being driven by tweets and statements through unofficial sources and and places like Telegraph. So, it's the bizar it's foggy. It's foggy. Here we are on May 27th. It's Wednesday afternoon and this just came out from the Kobes letter breaking Iranian state media announces initial details of theou the memorandum of understanding and I want to note what's missing from this so here's what they said they said military forces will withdraw from the vicinity of Iran the navy will lift its blockade of the straight of Hormuz Iran has committed to restoring the number of commercial transit ships through the straight of Hormuz to pre-war levels within one month boom oil just went cratering on that news. Iranian state media says military vessels not included in this draft agreement. So sorry US military, you know, some of our our largest bases, the Bahrain, the fifth fleet headquarters was in Bahrain. That got pretty messed up with Iranian missiles. But the idea that Iran's going to say is part of theou no more US ships, military ships in the Gulf. Quite a thing. I can't imagine the US ever agreeing to this. Um, and they say the management and routing of ship traffic through the straight of moves will be handled by Iran in cooperation with Aman. They're going to charge not tolls, uh, environmental fees. That's what they're calling them. >> They're learning. >> Yeah. And six, if a final deal is reached within 60 days, this agreement will be approved in a binding UN Security Council resolution. And boom. But look, no Lebanon, no restitution, no nuclear anything, no unfreezing of funds. This looks like what am I even reading here right at this point in time? There there's So it's bizarre that Iranian state media would come out with something that leaves off all of their main points um down below. And so agreeing with us, me here is Piper Sandler Tracy Shuhart on Twitter today putting out that the straight of Piper Sandler uh the research firm says that uh straight of is going to remain closed for months to oil and oil is going to hit new highs and they they aren't buying the talk that Iran deal is nearing. They're telling clients the straight of moons will largely stay closed and oil will hit new highs. Quote, "We think the straight of moons remains largely closed for months yet." meaning shortages become more urgent and oil hits new highs this summer. So that's according to the investment bank's energy and macro teams. So I don't think there's no deal. And since there's no deal, this energy crisis is just barely getting started and uh I I think we have we have to be prepared for vastly higher energy prices based on what we're seeing today. What do you think? >> No, I completely agree. I mean, with the backdrop of inflation already running hotter and and surging, I mean, and you know, this is just it's it's coming. The question is is why is the market really not paying any attention? The market seems to be paying more attention to the propaganda and the tweets, everything in the short run. And maybe the market's just refusing to believe that they're going to allow this to happen, right? The question is, can they control it because you've got two parties that are in there. So, we're setting up for some major surprises and shocks. And like you've talked about several times over the past couple of months. The normal demand destruction by allowing prices to go higher means that it's going to be an absolute baseball bat to the face to the average person who has no clue what's going on because the propaganda is keeping them in the dark, you know. And and sure, there's the possibility that maybe this all works out and they thread this needle perfectly, right? like I mean a 100 mile shot that hits you know bullseye it's possible but it's highly unlikely at this point uh with the information that's out there and big firms like Piper Sandler I mean they've got major resources that they put onto this and they're not going to just go out and make up some story to to to meet some narrative on the other side they're looking at the facts of the data like you are and saying this is a train wreck coming unless some miracle comes out of the blue. And look, I mean, how many times on a daily basis, well, weekly basis when oil either breaks out or yields break out, have we been told that we're going to have a deal? I mean, we've been told for from the beginning of this event that a deal is imminent and there's no deal. At what point do people just stop start ignoring what what tweets come out of the White House or Axios with, you know, them seeming to push the propaganda? Yeah, with with with the former MSAD agent Barack Raind writing the articles, it's it's a little suspicious. In fact, there are three parties in this. Of course, Israel is a party, too, in in a very realistic sense. So, look, u the this energy shock is just getting started and we're starting to see the ripples come through. You mentioned inflation and you and I are going to talk about that at some later point. And um and the Financial Times, sorry it's a little blurry, I'll read it for you. They they just on their headline uh just this morning said Iran energy shock starts to squeeze real wages in world's rich countries which is a fancy long way of saying inflation. >> Yeah, squeezing real wages. Yeah, prices are going up. Um we can we can simplify that because that's what we do at finance. Make it easy. Um so already though we're starting to see that real impact. It's really people are really starting to get hit and are starting to notice. And of course, we just came through a really punishing round of inflation with COVID and we have another one coming and um yeah, we just have to get ready for that. But it's rooted in this energy shock. That's where this is coming from. >> Can't print your way out of this one. I don't think >> No, I I don't think they can. I mean, supply demand uh is pretty simple from the standpoint, let's assume this continues. That's less oil. More money being printed just means more money chasing less supply which is going to further exacerbate the price. And let's say maybe they can use the options market and derivatives to to try to artificially hold that price down. then the consequences of that breaking if if they, you know, are are unable to pull it off is going to be much more severe if they just allow this to start unfolding in a natural manner and let people adapt to it instead of just, you know, baseball bat to the face, which is what it looks like it's coming. But at the same time, Chris, I'll tell you, the handwriting has been on the wall for quite some time and the evidence just continues to build. But it's really hard for people. That's one thing I've learned in 28 years of being in this industry. When when the media and the propaganda, the thing about propaganda is it works, right? What was it? Hitler, again, I'll butcher this, said, you tell a lie loud enough and long enough, people start to believe it. I mean, that propaganda, the constant, you know, information coming in and then looking and it's like, well, they've been warning me that prices are going to move, but they're not. So people just start to tune it out and they go on about their day, which is much more severe in the impact if they're not able to actually control this and and keep it from happening. And and that's the hard part because if you're looking at the math like you are, it's like I'm not going to I'm having to fight complacency from the standpoint of look, I'm not I'm not saying I'm getting complacent, but you have to fight that. Well, does it really matter? Because it does. the weight of the information on a on a scale of, you know, will it happen or not is just continuing to wait that this is a riskier and riskier situation by the week. >> Well, indeed, you know, Paul, they're doing everything they can't they can at this point to evade reality, right? Let's let's just ignore it. So, one of the things they've been doing, and I just keep screaming about this. I can't believe we're doing this. This is the draw downs in the strategic petroleum reserve of the United States. And you can see here, this is the Biden years where it was a strategic political reserve. They dumped it to try and you know into the 2022 election cycle, but also remember 2022 was kind of a perilous year. Stocks and bonds, liquidity cris, they were doing everything they could just to ease conditions, right, coming into that. So that was that was that was this is totally unprecedented. These are the largest two, you know, weeks of draw downs and it's and they're just building, right? It's just getting more and more and more. And so that's what we're doing in the United States. We're funding the world's oil demand from the SPR. And here's the problem, Paul. We talk about this all the time. The reason that we have to put so much out there is because demand is up here and supply. So, we're just bringing supply up to demand when instead we need prices to go up to bring demand back down to supply. But they don't want to do that for some reason. I don't know. It's political. They're worried about it financially. I don't know. But >> right, >> we're we're prices are being artificially held down somehow. And it's I know that because demand can't be above supply in something like oil for long, right? No, that just becomes a a huge huge crisis over time. So, >> well, here people have asked me this, Paul, like like how how long can they do that? So, the strategic petroleum reserve, the the SPR, the floor is about 150 million barrels. Currently, there's 365 million barrels in there, right? You can see it here over time starting in the 80s and it's they were supposed to be holding it at about 700 million barrels. China's is twice that. So, we could argue if this is even sufficient, but um that would have been sort of where we would want to hold it. We're obviously less than half that. This got all drawn down, started to rebuild it, bang, it's just coming back down again. So, if there's 365 million barrels in there, that means that there's about um 215 million barrels more to go before there's absolutely no more. Like, you just can't draw it down any further. So, that could be 158 days. That could get us close to the end of the year. But then we hit the wall, Paul, at full speed, right? That would be a really dumb thing to do. In fact, if I wanted to wreck the country, that's exactly what I would do. I would just apply every financial shenanigan, dump the SPR, and then I would have the country just hit a supply crisis at full speed. Um, that would be very damaging. Well, and look, if I'm our enemies, I'm going to jawbone and I'm going to give you a little bit of hope and I'm going to drag this out as long as possible and try to try to build some relationship with others cuz if we do draw that down in the next 158 days and this is still going on and we and we're in a position to hit that wall, what happens all of a sudden now if they've been we've realized that we've been played and they've built other individuals that says, "Hey, look, you you've been the bully around the world, so we're just going to cut your supply off and and you can rely on what you have and and you've explained that yeah, we may be a net exporter, but we can't refine everything that we need in the country. So, we're putting ourselves in a very weak position from a long-term standpoint for what? Political gains in the short run. And even the polling numbers don't show that it's working on the average individual. So, um I wish we were focused more on the long term instead of instant gratification and political narrative at this point. you and me both little reality, not just jawboning and narratives and all of that. Um, which is why for everybody listening, you know, if you if you have money in the markets, if it's being managed, you should have it managed as well as you possibly can by somebody who actually can see these risks, talk about these risks, uh, figure out a plan, get an actual strategy around this because this this energy shock we're talking about is going to be one of the most turbulent periods of financial history, unless we have it all wrong. Paul, you and I, we may have it all wrong. I don't know. We constantly ask ourselves, do we have this wrong? Could it be different this time? >> Probably best to at least hedge your bets and decide it's not entirely different this time, cuz it it never is. So, um, please, if you want to have your money managed by Paul and his team, go to Peak Financial Investing and fill out a simple form and somebody will get back to you right away. Well, within two business days, and start that process. And and Paul, I would recommend people start that process before the turbulence starts because it gets things get a little little chaotic in the midst of of turbulence, right? >> Yeah, they do. And the one thing that that I have to tell people is, you know, right now we caught up on a lot of annual reviews. We're there. Pace is pretty good. So, people are getting in a little bit quicker. But our clients that we serve come first. So, so if our clients have a lot of need because of things that are taking place or conversations, I make sure that I keep capacity in our schedule. So, sometimes it takes 2, 3 weeks or a little bit more to get on my calendar. Once I've taken somebody through the planning process, if the timing is not right, I know the I know their situation, we can move a little bit quicker after that. So, for those that are interested in just kind of kicking our tires, then go ahead and reach out. Let's have that conversation because it's no obligation. Worst case scenario, you walk away with a great retirement plan analysis. So, you know better of where you are and what your risks are to success. And then the second part is is you know you had asked me uh Chris kind of wanted to talk about this. Is it different this time? And last week my immediate my immediate response is maybe it is you know and and that's the truth. You have to you can't assume that it's not different this time. So I've been still manning that one myself but nobody had actually asked me that question. And when you did, I was like, "Okay, I got to be able to answer that a little bit better." I spent all weekend thinking about it, kind of looking at it, and and here's the conclusion I came to. The outcome, however bad, you know, whichever way it goes, will be different because it's not going to exactly repeat what has happened in the past because history rhymes, but it doesn't necessarily exactly repeat. But I don't believe that it can be different this time. Because different this time means we get out of this without any consequences or anything breaking. Okay. And and that means that that really a central planning government can can tweet and control our markets but it's a complex system and the one thing that we see is there are cycles throughout history. I mean you go back and look at the bubbles in the past you know those are cycles right things get you know they're firing on all cylinders. They reach maximum efficiency. You think everything's perfect and then something breaks. So, what could be different this time is maybe we don't have a deflationary collapse like the Great Depression in 1929. I still think we're going to have some deflationary impulse and I could be wrong on that and that's okay because I've got tools that'll help us navigate that because that's the importance of being adaptive. But what could be different is something breaks and and my concern is is if they just print us into oblivion, you're going to have the S&P, let's just pick a number, go up 100% in 5 years. But on the other hand, you've got commodities and emerging markets and some of these other sectors that are going up five or 600% over five years. Not a projection, just an analogy to kind of talk about what's taking place. And then the average person is still passive. They're overweight the S&P. And the end result is the inflation, the lack of purchasing power within US markets versus everything else means that person's still poor just at a slower pace than what they were before. So I fully believe, you know, in in that that depending on how something breaks, it's not different. It may be different on the outcome, but something is going to break. And for those people who are just head in the sand, passive, you know, looking in the hindsight bias over the past 20 years of what the outcome has been are are not going to be as better as prepared as those people that make that adaptation to where their portfolios can shift because because throughout history there are times to be passive. There's times to do nothing. There's times to ride the wave. But when you're in a situation like this where you have all these records and things that are cracking and popping under the surface and then you know something is going to break. So I you know the outcome may be dramatically inflationary instead of deflationary but I don't think it's different because when you reach these levels something breaks and the average person is not prepared for it and that's our job is to help them get get through it in the right manner. you know, if we said there's there's some amount of time out there. By the way, this is just the strategic petroleum reserve, the SPR. But if we look at total crude stockpile, so this is um crude. This is in commercial stocks. So commercial, you know, you got your Valero refinery. It's got all those tanks outside the refinery. There's oil in there, various levels. So when you add all of that up, those are called commercial inventories to the SPR. These are years starting from 2010 progressing so all the way to 2026. So we got 16 years of data here. We are now plumbing the lowest it's ever been ever in the last 16 years. Okay. And some of these years that we're comparing it against are a long time ago. Um so it's not, you know, yes, there's 820 million barrels in there. Sounds like a lot, but but it's not because there's a there's a minimum that that they can operate at before you can't use all 800, right? Some of them there's tank bottoms or sediment down there. There's pipeline fills. There's anyway, there's there's reasons you can't go all the way down. We don't know how we don't know what the super lowest part is, but it's getting there. So, a and this this right here, this is pretty aggressive decline, especially for this time of year. Um, and so that's you could say, well, where does this get serious? I don't know. You have to continue drawing this line. I don't know, July, August points down here at the 700 mark. I think that's where things get dicey. But then we could also look at gasoline on top and diesel down below. And you see here that red line, this is headed the wrong direction coming into the summer driving season for for gasoline. Diesel is at the very very bottom of the last 16 years of of range. Can't go a lot lower. So, but we've been exporting it like crazy to help the rest of the world not have to feel the pinch from the Gulf being the straight of moves being closed down in the Persian Gulf. We can't do this forever and we're just sort of pretending like we can do this forever and the markets are pretending like we can do this forever and we can't do this forever and so when this bites Paul it's going to be pretty dramatic I think. >> Yes. And I think it's going to happen so fast that only those that are prepared for it are going to be able to to adapt quick enough, prepared and aware of this information to adapt quick enough to get a really bad smack on their hand instead of losing a couple of limbs. >> Well, Paul, thank you for your time today. Have a great weekend and uh we'll be back next week. >> Good to see you, Chris.
US–Iran Ceasefire Talks: Always Two Days Away, Never Here
Summary
Join the discussion at Peak Prosperity: https://peak.fan/2p9bbyca Contact Peak Financial Investing at https://peak.fan/mry2nebe …Transcript
Nothing in this program should be considered investment advice. It is for educational purposes only. Please hit pause and read this disclaimer in full. We've been told for from the beginning of this event that a deal is imminent and there's no deal. At what point do people just start ignoring what tweets come out of the White House or Axios with, you know, them seeming to push the propaganda? Hello everyone and welcome a very special welcome to this episode of Finance. We have a lot to discuss today and back with me is Paul Ker of Ker Wealth Management. How you doing Paul? >> I'm doing good Chris. Having a good time during these very interesting times that we live in. >> Sure thing. So here's what I'd like to talk about today is going to be well I we're in the midst of the largest energy shock ever. But you wouldn't know it, Paul, from our markets, from the behavior of um oil is very different. You know, there's this old saying that we used to have back in the day when I was a trader, right? I did a lot of trading, which was um you uh you buy the rumor, sell the news. >> Yep. >> Okay. Oil's different. Oil is selling the rumor. I think it's going to buy the news. I actually think when when they announce that the straight is finally open, and we'll talk about that in just a second. How open is it? Not very. Um, but every time there's a hint of it being open, there's just like this massive wall of selling in oil. So, they're selling the rumor. Now, when it finally does open, I think the reality sets in. People like, "Oh, this is kind of a hot mess." Of course, it is. >> Um, but it's behaving very bizarrely. I'm watching very seasoned oil traders and longtime market participants really scratching their heads going, "This is not how this is supposed to work. This is bizarre this stage." >> You know, somebody mentioned it a week or two ago said, "Sell the tweet and buy the reaction." Right? So, the tweet drives the prices down and then buy the reaction depending upon how fast you move. And I thought that's just kind of bizarre how this market environment is cuz fundamentals don't matter because there's so much propaganda and effort being put into keeping those prices down and draining our strategic petroleum reserves. >> Yeah. >> Not a lot makes sense. >> No, it doesn't. Not I I I was on a number of interviews over this past few days and you know the phrase I'm using is the fog of diplomacy. Supposed to be the fog of war. I've never been through a thing like this. Marco Rubio ostensibly the State Department uh head isn't saying anything at all. Every so often he comes out and says, "Oh, there could be progress soon." But otherwise, this whole thing is being driven by tweets and statements through unofficial sources and and places like Telegraph. So, it's the bizar it's foggy. It's foggy. Here we are on May 27th. It's Wednesday afternoon and this just came out from the Kobes letter breaking Iranian state media announces initial details of theou the memorandum of understanding and I want to note what's missing from this so here's what they said they said military forces will withdraw from the vicinity of Iran the navy will lift its blockade of the straight of Hormuz Iran has committed to restoring the number of commercial transit ships through the straight of Hormuz to pre-war levels within one month boom oil just went cratering on that news. Iranian state media says military vessels not included in this draft agreement. So sorry US military, you know, some of our our largest bases, the Bahrain, the fifth fleet headquarters was in Bahrain. That got pretty messed up with Iranian missiles. But the idea that Iran's going to say is part of theou no more US ships, military ships in the Gulf. Quite a thing. I can't imagine the US ever agreeing to this. Um, and they say the management and routing of ship traffic through the straight of moves will be handled by Iran in cooperation with Aman. They're going to charge not tolls, uh, environmental fees. That's what they're calling them. >> They're learning. >> Yeah. And six, if a final deal is reached within 60 days, this agreement will be approved in a binding UN Security Council resolution. And boom. But look, no Lebanon, no restitution, no nuclear anything, no unfreezing of funds. This looks like what am I even reading here right at this point in time? There there's So it's bizarre that Iranian state media would come out with something that leaves off all of their main points um down below. And so agreeing with us, me here is Piper Sandler Tracy Shuhart on Twitter today putting out that the straight of Piper Sandler uh the research firm says that uh straight of is going to remain closed for months to oil and oil is going to hit new highs and they they aren't buying the talk that Iran deal is nearing. They're telling clients the straight of moons will largely stay closed and oil will hit new highs. Quote, "We think the straight of moons remains largely closed for months yet." meaning shortages become more urgent and oil hits new highs this summer. So that's according to the investment bank's energy and macro teams. So I don't think there's no deal. And since there's no deal, this energy crisis is just barely getting started and uh I I think we have we have to be prepared for vastly higher energy prices based on what we're seeing today. What do you think? >> No, I completely agree. I mean, with the backdrop of inflation already running hotter and and surging, I mean, and you know, this is just it's it's coming. The question is is why is the market really not paying any attention? The market seems to be paying more attention to the propaganda and the tweets, everything in the short run. And maybe the market's just refusing to believe that they're going to allow this to happen, right? The question is, can they control it because you've got two parties that are in there. So, we're setting up for some major surprises and shocks. And like you've talked about several times over the past couple of months. The normal demand destruction by allowing prices to go higher means that it's going to be an absolute baseball bat to the face to the average person who has no clue what's going on because the propaganda is keeping them in the dark, you know. And and sure, there's the possibility that maybe this all works out and they thread this needle perfectly, right? like I mean a 100 mile shot that hits you know bullseye it's possible but it's highly unlikely at this point uh with the information that's out there and big firms like Piper Sandler I mean they've got major resources that they put onto this and they're not going to just go out and make up some story to to to meet some narrative on the other side they're looking at the facts of the data like you are and saying this is a train wreck coming unless some miracle comes out of the blue. And look, I mean, how many times on a daily basis, well, weekly basis when oil either breaks out or yields break out, have we been told that we're going to have a deal? I mean, we've been told for from the beginning of this event that a deal is imminent and there's no deal. At what point do people just stop start ignoring what what tweets come out of the White House or Axios with, you know, them seeming to push the propaganda? Yeah, with with with the former MSAD agent Barack Raind writing the articles, it's it's a little suspicious. In fact, there are three parties in this. Of course, Israel is a party, too, in in a very realistic sense. So, look, u the this energy shock is just getting started and we're starting to see the ripples come through. You mentioned inflation and you and I are going to talk about that at some later point. And um and the Financial Times, sorry it's a little blurry, I'll read it for you. They they just on their headline uh just this morning said Iran energy shock starts to squeeze real wages in world's rich countries which is a fancy long way of saying inflation. >> Yeah, squeezing real wages. Yeah, prices are going up. Um we can we can simplify that because that's what we do at finance. Make it easy. Um so already though we're starting to see that real impact. It's really people are really starting to get hit and are starting to notice. And of course, we just came through a really punishing round of inflation with COVID and we have another one coming and um yeah, we just have to get ready for that. But it's rooted in this energy shock. That's where this is coming from. >> Can't print your way out of this one. I don't think >> No, I I don't think they can. I mean, supply demand uh is pretty simple from the standpoint, let's assume this continues. That's less oil. More money being printed just means more money chasing less supply which is going to further exacerbate the price. And let's say maybe they can use the options market and derivatives to to try to artificially hold that price down. then the consequences of that breaking if if they, you know, are are unable to pull it off is going to be much more severe if they just allow this to start unfolding in a natural manner and let people adapt to it instead of just, you know, baseball bat to the face, which is what it looks like it's coming. But at the same time, Chris, I'll tell you, the handwriting has been on the wall for quite some time and the evidence just continues to build. But it's really hard for people. That's one thing I've learned in 28 years of being in this industry. When when the media and the propaganda, the thing about propaganda is it works, right? What was it? Hitler, again, I'll butcher this, said, you tell a lie loud enough and long enough, people start to believe it. I mean, that propaganda, the constant, you know, information coming in and then looking and it's like, well, they've been warning me that prices are going to move, but they're not. So people just start to tune it out and they go on about their day, which is much more severe in the impact if they're not able to actually control this and and keep it from happening. And and that's the hard part because if you're looking at the math like you are, it's like I'm not going to I'm having to fight complacency from the standpoint of look, I'm not I'm not saying I'm getting complacent, but you have to fight that. Well, does it really matter? Because it does. the weight of the information on a on a scale of, you know, will it happen or not is just continuing to wait that this is a riskier and riskier situation by the week. >> Well, indeed, you know, Paul, they're doing everything they can't they can at this point to evade reality, right? Let's let's just ignore it. So, one of the things they've been doing, and I just keep screaming about this. I can't believe we're doing this. This is the draw downs in the strategic petroleum reserve of the United States. And you can see here, this is the Biden years where it was a strategic political reserve. They dumped it to try and you know into the 2022 election cycle, but also remember 2022 was kind of a perilous year. Stocks and bonds, liquidity cris, they were doing everything they could just to ease conditions, right, coming into that. So that was that was that was this is totally unprecedented. These are the largest two, you know, weeks of draw downs and it's and they're just building, right? It's just getting more and more and more. And so that's what we're doing in the United States. We're funding the world's oil demand from the SPR. And here's the problem, Paul. We talk about this all the time. The reason that we have to put so much out there is because demand is up here and supply. So, we're just bringing supply up to demand when instead we need prices to go up to bring demand back down to supply. But they don't want to do that for some reason. I don't know. It's political. They're worried about it financially. I don't know. But >> right, >> we're we're prices are being artificially held down somehow. And it's I know that because demand can't be above supply in something like oil for long, right? No, that just becomes a a huge huge crisis over time. So, >> well, here people have asked me this, Paul, like like how how long can they do that? So, the strategic petroleum reserve, the the SPR, the floor is about 150 million barrels. Currently, there's 365 million barrels in there, right? You can see it here over time starting in the 80s and it's they were supposed to be holding it at about 700 million barrels. China's is twice that. So, we could argue if this is even sufficient, but um that would have been sort of where we would want to hold it. We're obviously less than half that. This got all drawn down, started to rebuild it, bang, it's just coming back down again. So, if there's 365 million barrels in there, that means that there's about um 215 million barrels more to go before there's absolutely no more. Like, you just can't draw it down any further. So, that could be 158 days. That could get us close to the end of the year. But then we hit the wall, Paul, at full speed, right? That would be a really dumb thing to do. In fact, if I wanted to wreck the country, that's exactly what I would do. I would just apply every financial shenanigan, dump the SPR, and then I would have the country just hit a supply crisis at full speed. Um, that would be very damaging. Well, and look, if I'm our enemies, I'm going to jawbone and I'm going to give you a little bit of hope and I'm going to drag this out as long as possible and try to try to build some relationship with others cuz if we do draw that down in the next 158 days and this is still going on and we and we're in a position to hit that wall, what happens all of a sudden now if they've been we've realized that we've been played and they've built other individuals that says, "Hey, look, you you've been the bully around the world, so we're just going to cut your supply off and and you can rely on what you have and and you've explained that yeah, we may be a net exporter, but we can't refine everything that we need in the country. So, we're putting ourselves in a very weak position from a long-term standpoint for what? Political gains in the short run. And even the polling numbers don't show that it's working on the average individual. So, um I wish we were focused more on the long term instead of instant gratification and political narrative at this point. you and me both little reality, not just jawboning and narratives and all of that. Um, which is why for everybody listening, you know, if you if you have money in the markets, if it's being managed, you should have it managed as well as you possibly can by somebody who actually can see these risks, talk about these risks, uh, figure out a plan, get an actual strategy around this because this this energy shock we're talking about is going to be one of the most turbulent periods of financial history, unless we have it all wrong. Paul, you and I, we may have it all wrong. I don't know. We constantly ask ourselves, do we have this wrong? Could it be different this time? >> Probably best to at least hedge your bets and decide it's not entirely different this time, cuz it it never is. So, um, please, if you want to have your money managed by Paul and his team, go to Peak Financial Investing and fill out a simple form and somebody will get back to you right away. Well, within two business days, and start that process. And and Paul, I would recommend people start that process before the turbulence starts because it gets things get a little little chaotic in the midst of of turbulence, right? >> Yeah, they do. And the one thing that that I have to tell people is, you know, right now we caught up on a lot of annual reviews. We're there. Pace is pretty good. So, people are getting in a little bit quicker. But our clients that we serve come first. So, so if our clients have a lot of need because of things that are taking place or conversations, I make sure that I keep capacity in our schedule. So, sometimes it takes 2, 3 weeks or a little bit more to get on my calendar. Once I've taken somebody through the planning process, if the timing is not right, I know the I know their situation, we can move a little bit quicker after that. So, for those that are interested in just kind of kicking our tires, then go ahead and reach out. Let's have that conversation because it's no obligation. Worst case scenario, you walk away with a great retirement plan analysis. So, you know better of where you are and what your risks are to success. And then the second part is is you know you had asked me uh Chris kind of wanted to talk about this. Is it different this time? And last week my immediate my immediate response is maybe it is you know and and that's the truth. You have to you can't assume that it's not different this time. So I've been still manning that one myself but nobody had actually asked me that question. And when you did, I was like, "Okay, I got to be able to answer that a little bit better." I spent all weekend thinking about it, kind of looking at it, and and here's the conclusion I came to. The outcome, however bad, you know, whichever way it goes, will be different because it's not going to exactly repeat what has happened in the past because history rhymes, but it doesn't necessarily exactly repeat. But I don't believe that it can be different this time. Because different this time means we get out of this without any consequences or anything breaking. Okay. And and that means that that really a central planning government can can tweet and control our markets but it's a complex system and the one thing that we see is there are cycles throughout history. I mean you go back and look at the bubbles in the past you know those are cycles right things get you know they're firing on all cylinders. They reach maximum efficiency. You think everything's perfect and then something breaks. So, what could be different this time is maybe we don't have a deflationary collapse like the Great Depression in 1929. I still think we're going to have some deflationary impulse and I could be wrong on that and that's okay because I've got tools that'll help us navigate that because that's the importance of being adaptive. But what could be different is something breaks and and my concern is is if they just print us into oblivion, you're going to have the S&P, let's just pick a number, go up 100% in 5 years. But on the other hand, you've got commodities and emerging markets and some of these other sectors that are going up five or 600% over five years. Not a projection, just an analogy to kind of talk about what's taking place. And then the average person is still passive. They're overweight the S&P. And the end result is the inflation, the lack of purchasing power within US markets versus everything else means that person's still poor just at a slower pace than what they were before. So I fully believe, you know, in in that that depending on how something breaks, it's not different. It may be different on the outcome, but something is going to break. And for those people who are just head in the sand, passive, you know, looking in the hindsight bias over the past 20 years of what the outcome has been are are not going to be as better as prepared as those people that make that adaptation to where their portfolios can shift because because throughout history there are times to be passive. There's times to do nothing. There's times to ride the wave. But when you're in a situation like this where you have all these records and things that are cracking and popping under the surface and then you know something is going to break. So I you know the outcome may be dramatically inflationary instead of deflationary but I don't think it's different because when you reach these levels something breaks and the average person is not prepared for it and that's our job is to help them get get through it in the right manner. you know, if we said there's there's some amount of time out there. By the way, this is just the strategic petroleum reserve, the SPR. But if we look at total crude stockpile, so this is um crude. This is in commercial stocks. So commercial, you know, you got your Valero refinery. It's got all those tanks outside the refinery. There's oil in there, various levels. So when you add all of that up, those are called commercial inventories to the SPR. These are years starting from 2010 progressing so all the way to 2026. So we got 16 years of data here. We are now plumbing the lowest it's ever been ever in the last 16 years. Okay. And some of these years that we're comparing it against are a long time ago. Um so it's not, you know, yes, there's 820 million barrels in there. Sounds like a lot, but but it's not because there's a there's a minimum that that they can operate at before you can't use all 800, right? Some of them there's tank bottoms or sediment down there. There's pipeline fills. There's anyway, there's there's reasons you can't go all the way down. We don't know how we don't know what the super lowest part is, but it's getting there. So, a and this this right here, this is pretty aggressive decline, especially for this time of year. Um, and so that's you could say, well, where does this get serious? I don't know. You have to continue drawing this line. I don't know, July, August points down here at the 700 mark. I think that's where things get dicey. But then we could also look at gasoline on top and diesel down below. And you see here that red line, this is headed the wrong direction coming into the summer driving season for for gasoline. Diesel is at the very very bottom of the last 16 years of of range. Can't go a lot lower. So, but we've been exporting it like crazy to help the rest of the world not have to feel the pinch from the Gulf being the straight of moves being closed down in the Persian Gulf. We can't do this forever and we're just sort of pretending like we can do this forever and the markets are pretending like we can do this forever and we can't do this forever and so when this bites Paul it's going to be pretty dramatic I think. >> Yes. And I think it's going to happen so fast that only those that are prepared for it are going to be able to to adapt quick enough, prepared and aware of this information to adapt quick enough to get a really bad smack on their hand instead of losing a couple of limbs. >> Well, Paul, thank you for your time today. Have a great weekend and uh we'll be back next week. >> Good to see you, Chris.